Humana Kindred Merger

Humana along with two undisclosed private equity groups have partnered to purchase the home health agency segment of Kindred. The long term care, nursing homes and specialty hospitals will be purchased by other private equity groups led by TPG Capital and Welsh, Carson, Anderson, and Stowe.

Kindred is one of the largest post-acute care providers in the country. This split and sale to Humana could likely present many future problems for agencies who rely on Humana patients as a source of referrals and admissions. We can see the gradual decay and removal of certain contracts from agencies that overlap service areas in which a Kindred agency operates.

It wasn’t too long ago that Kindred transformed itself and positioned itself as a new force in the post-acute continuum. Humana has also been aggressive in the past year in making sure that it can do whatever is possible to reduce patient admissions to hospitals. Focusing on other less expensive options such as home health, Humana has taken the next step to solidify its position and bottom line.

The deal is not final and faces regulatory scrutiny similar to the CVS purchase of Aetna. We will be providing more information and analysis in the coming months as information becomes available.

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